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Sugar Production and Trade Rebound in Mexico
22.11.2021 14:40 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Sugar: World Markets and Trade (November 2021), sugar production for Mexico is forecast at 6.3 million metric tons (tons) (raw value) as rain has alleviated much of the lingering drought effects experienced in the previous 2 growing seasons. Planted area is forecast at 823,000 hectares, a slight 2 percent increase from the previous year mainly due to ideal growing conditions; harvested area is forecast at 791,000 hectares and national yields are forecast at 68 tons of cane per hectare. Veracruz, Jalisco, San Luis Potosí, and Chiapas are the leading sugarcane producing states, and account for nearly threequarters of total sugar production. Sugarcane production in Mexico is growing due to its high profitability and ease of production. Producers are organized into unions, and domestic policies — such as the guaranteed reference price — provide stability and additional profitability to the sector. The reference price is negotiated every year and is based on production and export volumes as well as domestic and international prices. As a result, prices for Mexico’s sugar are among the highest in the world. Sugar exports are forecast at 1.9 million tons, 53 percent higher than the previous year on greater production, although the composition of exports will depend heavily on U.S. sugar requirements as determined throughout the marketing year. Since 2014, sugar trade between the United States and Mexico has been managed under the U.S. — Mexico Sugar Suspension Agreements. The agreements suspended antidumping (AD) and countervailing duty (CVD) investigations of U.S. imports of sugar from Mexico and are reviewed and renewed as determined by the U. S. Department of Commerce every 5 years. The CVD agreement contains provisions to prevent an oversupply of sugar in the U.S. market by limiting shipments and the types of sugar exported from Mexico to the United States. The AD agreement establishes minimum reference prices for both refined and raw sugar exported by Mexico to the United States.
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